China Requires User Consent for Facial Recognition Payments

That’s in contrast to the mandatory facial recognition laws for mobile users.

CapitalWatch Staff
    Jan 23, 2020 6:00 AM  PT
China Requires User Consent for Facial Recognition Payments
author: CapitalWatch Staff   

Perhaps the most advanced in mobile payments technology, Chinese authorities have issued the first rules for facial recognition payments this week.

Even street vendors in China are now accepting facial imaging for payment, as BiometricUpdate reported. In response to the growing biometric-based payment system in the country, the Payments & Clearing Association of China has introduced guidelines which, among other things, stressed user consent. 

That's in contrast to the obligation of facial recognition scans required of all mobile users registering new SIM cards. The rule, which the Ministry of Industry and Information Technology  said aims to "protect the legitimate rights and interest of citizens in cyberspace" went into effect in December. 

And while some were supportive of the move, others expressed skepticism that it would strengthen information security and called for privacy protection, The Guardian reported.

In the financial sector, regulators required merchants to provide customers an option to decline facial recognition and use other methods of payment. In addition, as Caixin Global wrote, facial data cannot be stored and must be stored separately from other information such as bank numbers. Lastly, institutions must verify a user's identity in ways additional to his or her facial image.

Chinese tech giants Alibaba Group Holding Ltd. (NYSE: BABA; HKEX: 9988) and Tencent Holdings Ltd. (HKEX: 0700) operate China's largest mobile payment platforms Alipay and WeChat Pay and they were the first to delve into facial recognition payments. Alibaba has used facial recognition as one of its New Retail features and its payments platform has even released beauty filters to go with the new technology.